First Solar (Nasdaq: FSLR) is lower Friday morning following a downgrade at Raymond James earlier.

The firm cut First Solar from Market Perform to Underperform, seeing its legacy U.S. utility-scale project profitability falling off in the coming years. Analyst Pavel Molchanov notes that, although the firm avoided putting a Sell rating the the company, First Solar has become just as good a short opportunity as its peers.

Molchanov noted, "The solar index (KWT) is up 16% in the past two days. Shocked? Don’t be. This is practically a carbon copy of what happened one year ago." After the index gained 26 percent in the same period last year, it ended down 33 percent for the year, the analyst noted. "It is uncanny how closely the current situation resembles that one – a surge of macroeconomic optimism, a few positive industry datapoints, and the stocks’ high beta (along with a short squeeze) takes care of the rest – a classic recipe for an irrationally exuberant “junk rally.""

On legacy projects, Molchanov notes that First Solar signed those when it had a pricing advantage over peers and new signings will carry far lower margins now that PV prices are at 60 cents to 70 cents per Watt.

Revenue won't be a problem at First Solar; Molchanov explains, "In our brand-new 2014 estimates, we project revenue relatively flat y/y, but gross margin keeps compressing: 35% in 2011, 24% in 2012, 21% in 2013, and 17% in 2014. As a result, profitability falls off the proverbial cliff: we project earnings falling by 24% in 2013 and an even steeper 39% in 2014."

The firm still sees FY13 revs of $3.551 billion and FY13 revs of $3.818 billion. EPS will be a loss of $1.31 per share and profit of $3.53 in FY12 and FY13, respectively.

First Solar is down over three percent ahead of trading. Notably, short interest is down 4.8 percent to 24.64 million shares -- 41 percent of float -- as of December 14th.